The Airline Formerly Known as Express I

Cardinal

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Northwest Announces Filing of Registration Statement for the Initial Public Offering of its Wholly Owned Subsidiary, Pinnacle Airlines Corp.


http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-25-2002/0001675842&EDATE=

NEW YORK, Feb. 25 /PRNewswire-FirstCall/ --
Northwest Airlines Corporation (Nasdaq: NWAC) announced today that a
registration statement has been filed with the U.S. Securities and Exchange
Commission relating to the initial public offering of its regional airline
subsidiary, Express Airlines I, Inc., which will be renamed Pinnacle Airlines
Corp. All of the shares are being offered by an indirect wholly owned
subsidiary of Northwest Airlines Corporation.
A registration statement relating to these securities has been filed with
the Securities and Exchange Commission, but has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior to
the time the registration statement becomes effective. This press release
shall not constitute an offer to sell or a solicitation of an offer to buy,
nor will there be any sale of these securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state or
jurisdiction. The offering is being lead-managed by Morgan Stanley, the sole
bookrunner. Co-managers of this offering will be named after filing.
Pinnacle Airlines Corp. provides Northwest with regional airline capacity
at its domestic hub airports in Detroit, Minneapolis/St. Paul and Memphis and
offers scheduled passenger service operating 34 Bombardier Canadair Regional
Jets or CRJs and 24 Saab 340 turboprops with approximately 286 daily
departures to 60 cities in 24 states. Northwest has agreed to increase
Pinnacle's fleet to 83 CRJs by April 30, 2004.
When available, a copy of the preliminary prospectus relating to the
offering may be obtained from Morgan Stanley at 1585 Broadway, New York, NY
10036, (212) 761-4000.
 

FOAgain

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Wow. All eyes are on this deal!!! This could be the year of the great WO sell off.
 

ksu_aviator

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I've been hearing rumors about this happening for a long time. Even before 9/11. The big question is who will buy?
 

BluDevAv8r

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ksu_aviator said:
I've been hearing rumors about this happening for a long time. Even before 9/11. The big question is who will buy?
Institutional investors such as pension funds, insurance companies, commercial banks, etc...anyone with a lot of cash. IPO's are not sold to the general public. Why wouldn't the institutional guys want in on these? The capacity-buy agreements stipulate fixed net-income margins for the life of the agreement. Virtually riskless....positive cashflow.

Neal
 

rjcap

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Does anybody know or would like to venture a guess as to the enforcement provisions of scope if the WO's are spun off ???

I'm curious if the spin off would release the WO's from any growth restriction ?
 

Andy Neill

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I don't know the details of the NW scope limitations. If they are anything like those in the Delta and United contracts, I don't think that spinning off the WO's would provide any relief. SkyWest and ACA are bound to Delta and United scope limits just like Air Wisconsin is to United and ASA and Comair are to Delta.

To be more precise, Delta is bound to the Delta contract limits which they pass on through codeshare agreements with SkyWest, ACA, Comair, and ASA. United is cound to the United contract limits which they pass on to SkyWest ACA, and Air Wisconsin.
 
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publisher

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This is but the beginning of this. The merits of wholly owned has shown itself to be a falsefront.
 

BluDevAv8r

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Originally posted by publisher This is but the beginning of this. The merits of wholly owned has shown itself to be a falsefront.
Publisher, in your experience, would you disagree that one airline...from 37 seat jet to 777 would be more pragmatic than a wholly-owned situation....or even worse, a situation such as UAL has currently? What would you say is the ideal? You seem see a positive side to small jet airlines working under capacity buy agreements with large jet airlines....with scope restrictions, etc. Wouldn't One Smooth Airline be the perfect solution to the horrible issue known as scope?

Neal
 

FOAgain

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One big happy family. Why don't the big wigs see the light? Afraid it might make the employees happy?
 
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